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October 27 and 28, 2003 Room 302 Capitol Building Cheyenne, Wyoming
Committee Members
Senator Curt Meier, Cochairman
Representative Tony Ross, Cochairman
Senators Cale Case, Mike Massie, Charles Scott and Kathryn Sessions
Representatives Pete Illoway, Jene Jansen, Lorna Johnson, Frank Latta, Marty Martin, Del McOmie and Ed Prosser
Mike Causey and David Gruver
Please refer to Appendices 1a and 1b.
Meeting Attendance (Absent)
Committee
Members
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Monday October 27, 2003
Cochairman Meier called the meeting to order. The agenda for the meeting is attached as appendix 2. Cochairman Ross moved to amend the minutes from the last meeting on page 4 by deleting 55% and inserting 65%. As amended, the minutes were approved.
Elections issues
Secretary of State Joe Meyer provided an update on funding for the Help America Vote Act (HAVA). He provided an updated memo on the issue to the Committee. (Appendix 3). Since his last memo, the U.S. Senate had approved additional funding for HAVA and if the House follows suit, he will be able to complete contracts under negotiation to implement a statewide voter registration system. The timing for implementation of the system will depend on the release of federal funds. If final federal action is taken, the Secretary will recommend appropriation of additional state funds to complete HAVA requirements.
According to Secretary Meyer the remedy for HAVA violations appears to be the inability to hold a federal election. Deputy Arp testified that North Dakota was given an exemption from HAVA since that State had no registration requirement before the enactment of HAVA. Other states cannot take advantage of that exemption.
The Committee discussed the implementation of the system, the security required, requirements for registration, provisions for challenging voters, and provisions related to disabled persons. Secretary Meyer stated that HAVA contains provisions that Wyoming should address beyond the voter fraud issue, which Committee members suggested was not a problem in Wyoming.
Deputy Arp addressed proposed election code amendments, provided in writing to the Committee. (Appendix 4). The proposals address eight topics, identification required under HAVA, identification procedures, complaint procedures, temporary registration for military personnel, aligning registration requirements for HAVA and the state laws, and other minor changes addressed in appendix 4.
The Committee asked that the proposed changes be placed into draft form by LSO.
Vacancies in office (04 LSO 0025.W3, Appendix 5).
Tom Throop and Sarah Gorin, Equality State Policy Center addressed the Committee and provided a written response to the draft bill for filling vacancies. (Appendix 6). Mr. Throop testified that the bill is anti-democratic in placing the selection process for filling vacancies in the hands of a group representing a smaller electorate. Joe Evans, Wyoming County Commissioners Association, opposed that portion of the bill in which county boards of commissioners would no longer appoint vacancies in county offices.
Jim Willox, Wyoming State Republican Party Chairman addressed the Committee. He supported the bill draft. In his view, the current system allows county commissioners of the opposite party of the vacating person to fill the vacancy. A second problem is that for Senators, county commissioners who do not even live in the legislative district fill the vacancy.
The Committee discussed the bill and the proposed amendments to the draft presented by Cochairman Meier (appendix 7). Representative Ross moved the bill be sponsored by the Committee in the upcoming session. The motion failed 4-8 with Senator Meier and Representatives Illoway, Prosser and Ross voting "aye" and Senators Case, Massie and Sessions and Representatives Jansen, Johnson, Latta, Martin and McOmie voting "no". (Senator Scott was not yet present at the meeting.)
Representative McOmie moved that a bill be drafted to change the time for meeting for filling vacancies from 10 to 15 days and to specify that the party from which the vacating person belonged at the time of the election and not at the time of vacating the office should be controlling. The motion passed.
Campaign contributions
LSO staff addressed bill drafts 0038.W3, campaign contribution amendments, and 0094.W3, campaign contributions (appendices 8 and 9). The Committee discussed the bill drafts and the proposed amendment to 0038.W3; (appendix 10) which addresses reporting requirements.
Jim Willox testified in support of the amendments made by both and noted that 0094.W3 would not allow business entities to make contributions, which is a problem in his view for small businesses. The Committee discussed the issue of allowing contributions from business entities. Mr. Willox noted that the proposal to allow such contributions follows the lead of many states and the draft imposes lower limits than most states.
Mr. Throop and Ms. Gorin addressed the proposed legislation, providing written testimony. (Appendix 11). Mr. Throop noted that 0038.W3 allowed businesses beyond the small businesses to make contributions. If businesses are allowed to make contributions the reporting requirements should be made analogous to PACs not individual contributions. Representative Johnson noted that was her intent, although not reflected in the proposed amendment. Ms. Gorin reiterated the importance of requiring a report from both the contributor and recipient. On the contribution changes, Ms. Gorin was opposed to increasing the amounts. Ms. Gorin provided information on the spending on Wyoming State Senate and House raises in 2002 and other state's contribution limits. (Appendix 12).
Representative Illoway moved to sponsor 0038.W3 as a committee bill; the motion was seconded by Representative Prosser. The Committee consensus was to include businesses with registered agents as businesses allowed to contribute rather than "domestic business" as used in the draft bill. The Committee discussed the issue of restricting foreign contributions, but no action was taken on the issue. The Committee discussed the issue of reporting contributions by business entities. The main motion, as amended, failed 3-9, with Senator Meier and Representatives Illoway and Prosser voting "aye"; Senators Case, Massie and Sessions and Representatives Jansen, Johnson, Latta, Martin, McOmie and Ross voting "no". (Senator Scott was not yet present at the meeting.)
Senator Case moved 0094.W3 be sponsored as a committee bill in the upcoming session. Representative Ross seconded. Representative McOmie moved to delete the subsection (c) amendments from the bill. The motion was seconded by Representative Latta. That motion passed. The main motion as amended failed 5-7 with Senators Meier and Case and Representatives Latta, McOmie and Ross voting "aye"; and Senators Massie and Sessions and Representatives Illoway, Jansen, Johnson, Martin and Prosser voting "no". (Senator Scott was not yet present at the meeting.)
Senator Meier discussed a proposed bill regarding term limits. (04 LSO 0115.L2, Appendix 13). Senator Case asked that the bill be drafted for consideration by the Committee at the next meeting. The Committee discussed looking at the issue of term limits generally at the next meeting and voted 6-6 not to do so; the affirmative motion failing on the tie vote.
Telecommunications
Cochairman Ross called the meeting to order after lunch and presented a report from the Telecommunications Subcommittee. The Subcommittee was recommending three bills for the full Committee's consideration. (04 LSO 0166.C1, 0167.C1 and 0168.C1, appendices 14 through 16). Cochairman Ross also noted that the Committee has been asked to consider the issue of whether the $5 filing fee for filings with the PSC should be increased.
PSC Commissioners Steve Ellenbecker, Kristin Lee and Steve Furtney addressed the Committee. Mr. Jeff Docker of the Department of Family Service also addressed the Committee. Commissioner Ellenbecker discussed the participation in the telephone assistance program (TAP); 2,000 residents out of approximately 39,000 eligible households in Wyoming participate in the program. Commissioner Ellenbecker suggested that if the Legislature wished broader participation, it could make the additional $10 credit provided under draft 0167.C1, an automatic deduction on the eligible subscribers telephone bill. Currently persons must apply for the TAP program. Mr. Docker provided information regarding the number of eligible participants and the eligibility criteria under current law. (Appendix 17). He noted that the DFS is developing an eligibility computer system and TAP eligibility could be added to the program. The additional cost would be about $100,000 for development and $25,000 for operation of the program. The overall system would not be available until July 2005.
Cochairman Meier questioned whether the number of persons counted as eligible persons qualified under different categories. There were some people eligible for more than one program, thus an overstatement of the eligible persons according to Mr. Docker, but the exact number was unknown.
Committee members questioned why the program should be expanded to persons that have not applied for the program. In response to Committee questions, as to why the service has not been more widely utilized DFS representatives suggested that the outreach has not been as effective as it could have been. Senator Case summarized the issues as to whether the program should be expanded by increasing the subsidy amount or by making the eligibility automatic. Chairman Ellenbecker stated that if expanded to cellular phone use the federal funds for the program would be jeopardized.
The Committee next discussed the portions of 04 LSO 167.C1 addressing the universal service fund. The draft bill increases the threshold for eligibility for state USF funds, moving up to 135% and then 140% of the statewide average and limiting the number of lines to one residential line. Commissioner Ellenbecker explained the functioning of the state USF and stated that he did not believe anyone has done the necessary study to be able to answer the question of what the final effect would be on telephone bills. He noted that all business customers would be ineligible for support; residential for one line only. Currently all business and residential lines which meet the 130% of the statewide average qualify for USF support.
The Committee discussed the effect of the draft bill and the 1995 Wyoming Act, the need for additional study of the issue and whether the draft should be introduced in a budget session. The Committee took public testimony on 167.C1. Mike Ceballos, Qwest, testified that the draft will impact a number of customers, but the exact effect on particular customers is unknown. He suggested that the USF provisions in the draft should be moved to the study bill 04 LSO 0168.C1. The TAP provisions could be addressed separately. The bill will not affect Qwest's receipt of funds, but will affect customers differently but exactly how is unknown. Companies without zone rates will be affected differently because the business lines would be affected differently. Qwest has historically supported allowing wireless to receive USF, but on the same playing field and subject to the same requirements as wire line companies. Qwest has 40,000 of its 200,000 customers receiving USF support.
The Committee discussed how raising the threshold would affect rates of those under and those over the threshold (130% of the statewide average) in opposite ways.
Fred Frantz and Chuck Simino, Sprint, testified that a second line or business line would see a 200% increase in rates under the draft. Mr. Frantz testified that there were nearly as many wireless telephones as wire telephones in the state. Committee members noted that under the current law, a business can use additional lines with little financial impact.
Chuck Simino, addressed wireless portability. The FCC ruled that wireless providers must provide number portability from carrier to carrier. Wire carriers have agreed to provide portability to wireless carriers. Currently the rule affects only the top 100 metropolitan areas in the country, none of which are in Wyoming. Mr. Simino testified that wire line carriers are losing lines to wireless companies and cautioned against allowing USF support for wireless carriers.
Commissioner Ellenbecker testified there were about 300,000 wireline customers in the state and about 50,000 qualify for state USF support. All who qualify receive the support, there is no application required, thus no one pays more than 130% of the statewide average rate.
Commissioner Ellenbecker addressed 0166.C1- Telecommunications- Pricing Methodology. It would be onerous to require new pricing studies as provided in the draft bill. Commissioner Ellenbecker provided three documents regarding pricing telcommunications services under the 1995 Act. (Appendices 18 through 20). He suggested that it has taken so long to review all total service long run incremental cost (TSLRIC) studies that it would be difficult to implement the review of new studies in the time frame of the proposed legislation. While past implementation may not have been perfectly uniform, there are reasons for the differences in pricing beyond the non-uniform application of TSLRIC. He suggested that the state might be so close to competition that it would be better not to implement what amounts to increased regulation by the resubmission and reevaluation of all TSLRIC studies.
Bryce Freeman, Office of the Consumer Advocate, addressed the proposal to review the TSLRIC studies. He agreed with most of Chairman Ellenbecker's testimony. On the second line support from the USF, he noted there is almost no incremental cost associated with a second line, but the second line is averaged with the first line. Failing to subsidize the second line could result in the increase of price for the first line due to customers dropping the multiple lines. While supporting the study proposed in 04 LSO 0168.C1, he suggested that the issue should not become a rural versus nonrural. The public obligation should be universal access to essential services.
Liz Zerga, Western Wireless, addressed the Committee. The problem in her view is that the state USF stifles competition in that it only helps incumbent wire line companies. Although there was legislation allowing wireless services access to the state USF, the PSC has ruled that the wireless company must price the same as the wireline company to receive the USF support. That will not be done due to wireless' lower cost. Her company supports moving to the cost based fund and supports 168.C1.
Senator Sessions questioned whether wireless companies access the federal fund. Ms. Zerga noted they do. The Committee discussed the effect of wireless accessing the state USF. Ms. Zerga stated until the bill making the state USF a cost based fund was drafted, it would not be possible to determine the effect on wireless access.
The Committee discussed how wireless companies are regulated in Wyoming. The wireline incumbent companies are regulated by the PSC. Wireless companies are regulated by the federal government requiring that there were at least two companies in each service area. The FCC regulates wireless carriers less than the PSC regulates the incumbent wireline companies.
Mr. Frantz clarified that wireless companies could qualify for state USF support, but would need to be subject to quality service regulation and that Western Wireless has chosen not to be so regulated.
Bruce Asay, representing independent companies in the state testified against the incremental raise in the USF threshold found in 167.C1 and supported a fixed dollar amount. Three companies in the state receive state USF with one company receiving the lion's share. That is because the federal USF support must be considered first and that receipt brings many companies below the 130% statewide average threshold. All wireless companies are eligible for state USF if the price meets the same benchmark (130%) of the statewide average, that a wireline company is required to meet. That price would however, make wireless service too expensive. Review of TSLRIC should not be pursued in Mr. Asay's view. For very small companies, there should be a waiver provision for TSLRIC studies.
In response to Committee questions, Mr. Asay preferred a $30 fixed benchmark, but noted a $35 benchmark would be acceptable. The Committee discussed the effect of only reviewing TSLRIC studies for those companies which draw from the state USF.
Commissioner Lee testified that the PSC has authority to require additional TSLRIC studies under W.S. 37-15-401. Senator Case moved to table 166.C1. The motion passed 13-0.
Cochairman Ross asked for discussion regarding pursuing the TAP provisions of 167.C1. Cochairman Meier suggested not increasing the amount of the TAP program but making the eligibility automatic. Representative Illoway moved to indefinitely postpone 167.C1. The motion was seconded. Senator Case moved to divide the motion and bill by considering the TAP. The straw poll determined not to pursue the issue. The next issue considered was the increase in the USF threshold to 135%. The straw poll determined that the issue should not be pursued. The next issue considered was the limitation of the USF to single line residential service. That, along with the balance of the bill was also not pursued.
Representative Illoway moved the Committee sponsor 04 LSO 168.C1 in the upcoming session. Representative McOmie suggested that the issue of studying the inclusion of multiple lines be included in the bill draft. Senator Case moved on page 2-line 16, after "fund" to insert "and implications and desirability of supporting only a single line for each business and residential customer receiving support through the fund". The amendment passed. Senator Massie moved to insert "and the USF subsidy level" at the end of the Case amendment. The motion was seconded and passed. The main motion passed as amended 9-4; with Senators Massie, Meier and Case and Representatives Illoway, Jansen, Johnson, McOmie, Prosser and Ross voting "aye"; Senators Scott and Sessions and Representatives Latta and Martin voting "no".
Commissioner Lee asked for the drafting of a bill increasing public service commission filing fees. Representative Ross explained the PSC request increasing filing fees with the PSC from $5 to $60. Commissioner Lee also asked for the money to be placed in special revenue fund under the PSC rather than the general fund. The Committee agreed to draft a bill for consideration at the next meeting.
Tuesday October 28, 2003
Municipal-utility relations
LSO staff explained draft legislation Joint powers boards 04 LSO 0092.W1 (appendix 21). The bill broadens the ability of joint powers boards to operate and own electrical and natural gas systems by joint powers board.
Ken Lewis and Barbara Bonds, representing the city of Cheyenne, testified in favor of the bill. Ms. Bonds noted that unless a power is specifically granted in a statutory listing of powers, those not listed are excluded when courts interpret the law. Ms. Bonds further noted that a joint powers board can issue revenue bonds for the purposes stated, without a vote of the people.
PSC commissioner Lee noted the PSC has no jurisdiction over joint powers board activities in operating a utility. She further explained that the bill allowed for the joint powers board to own the hard assets for distribution, transmission and delivery for electrical systems.
LSO staff introduced 04 LSO 0093.W1, electric power authorities (appendix 22). Ms. Bonds explained the provisions of the bill. The bill would allow municipalities to enter into agreements with other municipalities, including those outside of the borders of the state (within fifty miles) to finance the acquisition and operation of electric systems. Mike Varney, mayor of Torrington, addressed the bill draft, noting that his city does not have the ability to generate power under current law and would like to have that ability.
The Committee discussed the breadth of the bill, noting it would allow a combination of cities to enter into the electric generation business beyond the limitations of the current law.
LSO staff explained 04 LSO 0089.W1- Infrastructure authority. (Appendix 23) The draft bill would provide for a state authority for the transmission of electricity and telecommunications infrastructure.
LSO staff explained 04 LSO 0197.W1- Electric power-revenue bonding. (Appendix 24) The bill would provide for the issuance of revenue bonds for electric power generation and transmission facilities by cities, towns and joint powers boards. Cochairman Meier noted he asked that the bill be drafted but that it tracked closely a proposal voted down at the last meeting and thus would not be proposing the bill as a Committee sponsored bill.
Bruce Asay and Jody Levin, representing independent telecommunications companies and Qwest respectively, addressed the infrastructure authority bill, 04 LSO 0089.W1. Mr. Asay stated that telecommunications should not be included within the bill. Representative Illoway moved to delete all references to telecommunications from the bill should it go forward. The motion was tabled pending further discussion.
Mac McLennan, Tri-State Generation, addressed the packet of bills and noted that there were additional problems regarding western power generation and transmission not addressed by the bills and until those problems were addressed, such as infrastructure development, creating additional generation will have little effect. Other members of the public supported the development of transmission lines by the state and the need to shorten the permitting processes.
Rick Kaysen, Xcel Energy and Cheyenne Light, addressed the four bills. He noted there is no PSC oversight of rates of municipal utilities. He urged that the issuance of revenue bonds should be subject to a vote of the people. He noted the municipal utilities would not be exempt from the federal regulations which also limit private sector building of generation facilities. Mr. Kaysen provided three documents along with his oral testimony. (Appendices 25 through 27). Included within those items was a customer count of Cheyenne Light. Mr. Kaysen noted numerous issues that would need to be addressed in response to earlier questions as to whether the Cheyenne Light system could partner with a municipality for generation and distribution facilities. The municipalization of utilities has been addressed in other states and Mr. Kaysen presented information on that issue. (Appendix 27) He noted the risks that would be borne by the cities if the municipalization of utilities were undertaken. Mr. Kaysen testified the issue involves free enterprise versus government operated utilities and generally opposed the proposed legislation before the Committee.
Bob Tarantola and Erin Taylor, Pacificorp, addressed the Committee. They provided an editorial concerning municipalization. (Appendix 28). Pacificorp was vehemently opposed to the legislation allowing municipalities to expand into private industry. All four proposals as currently before the Committee were opposed. Even with amendments some of the proposals would never be supported by Pacificorp. The proposal allowing the generation of electricity might be supportable, but there should be no power of condemnation and that should be explicit in the bill. Pacificorp would also be willing to work on the infrastructure authority bill.
Cochairman Ross stated the Committee is searching for solutions and the positions being taken were not being done in an attempt to reach solutions. Mr. Tarantola testified that there are undertakings currently to develop a regional approach to electric transmission problems. Mr. Tarantola also addressed generation capacity and actions being taken by Pacificorp regarding that issue. He reiterated that his position is not to purely oppose potential solutions, but that he would not support a mechanism to allow municipalities to take customers from his company.
Ken Lewis, City of Cheyenne, spoke in support of the joint powers bill and the electric power authorities bill drafts. He noted that in order to control the cost of the electricity the municipalities must be able to control the production of the commodity and they could only do so with revenue bonding authority. George Parks, WAM, spoke in favor of the revenue bonding by municipalities for electric facilities.
Senator Scott moved that 04 LSO 197 be redrafted for consideration at the next meeting removing page 2-line 11 through page 3-line 17. The intent would be to limit the bill to the existing municipal power agencies. Representative McOmie seconded the motion. The motion passed.
Senator Scott moved to authorize the cochairmen to develop an informal working group and provide a draft on the language deleted from 04 LSO 197, with such other conditions and subject to PSC jurisdiction as determined advisable. Senator Scott explained that the intent was to provide much latitude to the working group to allow the municipalities some ability to deal with utilities serving the residents of the municipality. The motion was seconded by Senator Meier and failed.
Representative Illoway moved to continue consideration of the infrastructure authority bill, 04 LSO 0089.W1 at the next meeting. He further moved to remove telecommunications from 04 LSO 89.W1. The amendment passed. Senator Scott moved to remove the reference to natural gas. The motion was withdrawn. Senator Scott moved to add a provision authorizing the authority to investigate and prioritize transmission corridors and add a provision to allow the authority to enter into the process of permitting and acquiring rights of ways. The amendment passed. Senator Scott suggested that the Committee Chairmen should work with the Governor's office and make necessary changes as deemed advisable. LSO staff explained that there were issues related to Article 6, section 16 of the Wyoming Constitution and that should the Committee proceed with consideration of the bill the LSO would provide a memorandum on the issue. The main motion as amended passed.
Representative McOmie moved 04 LSO 0092.W1 be sponsored as a Committee bill at the next session. The motion was seconded and failed 1-12, with Senator Sessions voting "aye".
Senator Case moved 04 LSO 0093.W1 be sponsored as a committee bill. Senator Massie moved to require a vote of the people before any action is taken under the authority of the bill. The motion passed. Senator Massie moved on page 12 –line 19 to delete language of not being subject to the PSC jurisdiction and inserting language that would place the new municipalities exercising authority under the bill under the PSC jurisdiction. The amendment passed. Senator Scott moved to indefinitely postpone consideration of the bill. The motion was seconded and passed 8-5 with Senators Case and Scott and Representatives Illoway, Jansen, Martin, McOmie, Prosser and Ross voting "aye" and Senators Meier, Massie, Sessions and Representatives Johnson and Latta voting "no".
Contractor licensing
Representative Latta presented a report from the contractor licensing subcommittee. Laurie Urbigkit Wyoming manufactured housing association addressed 04 LSO 0121.W1 (Appendix 29). She explained the purposes of the bill and its provisions. Ms. Urbigkit noted that while the federal government has required manufactured housing standards, the ramifications for not acting are not known. Ms. Urbigkit stated that at the federal level the legislation was backed by consumer groups and that the legislation could help on warranty issues. Committee members questioned the scope of the bill and noted that other issues such as foundation work and trim and finish work are often problems for consumers. Ms. Urbigkit noted the limited types of homes covered under the proposed legislation based upon the definition of new manufactured home. Ms. Urbigkit presented a list of proposed amendments. (Appendix 30)
George Parks, WAM, expressed concerns that the use of the term "local building official" should be made consistent throughout the bill. A representative of a local building official should be on the Commission. A provision should be inserted for the initial commission members not requiring them to be certified inspectors. Reference to a plumbing contractor should be inserted in the final provision on page 22-line 3.
Representative Illoway moved the bill be amended for further consideration by the Committee at the next meeting. The motion was seconded by Representative McOmie. Representative Illoway moved to include the amendments by Ms. Urbigkit and the suggestions by Mr. Parks. Representative Latta moved to retain the word "independent" in opposition to the proposed amendment by Ms. Urbigkit.
Senator Scott moved page 3-line 19 delete "current" and insert "or subsequent similar federal enactment". The Committee consensus was to do so. The Committee consensus was for the LSO to work on the various suggested amendments and provide the amended bill to Representative Latta and the Subcommittee for review. Representative Prosser moved to delete "temporary" and retain "block set". Ms. Urbigkit asked for leeway to work on the issue.
A straw poll was taken and the Committee agreed to have the bill redrafted with Ms. Urbigkit's amendments, Mr. Parks amendments, the amendments approved above and to provide copies to the Subcommittee members for review without an additional subcommittee meeting. Senator Massie asked that the Committee invite HUD and DOT representatives to the next meeting. The Committee agreed to do so.
Insurance
Ken Vines and Stephanie Bryant, Insurance Commissioner and Deputy Insurance Commissioner addressed 04 LSO 0095.W3. (Appendix 31) The bill is intended to allow the Department to maintain its accreditation by the National Association of Insurance Commissioners. Representative Illoway moved the bill be sponsored by the Committee in the upcoming session. Representative McOmie seconded. Senator Scott moved page 12-line 17 after "accept" insert ",". Same amendment on page 16–lines 4 and 18. The motion was seconded by Representative Illoway and passed. Mr. Vines presented a proposed amendment (appendix 32). The amendment was moved by Senator Case and seconded by Senator Meier and passed. The main motion, as amended, passed unanimously.
Ms. Bryant, addressed 04 LSO 0096.W2. (Appendix 33) The bill would place insurance producer licenses on a two year period, versus the annual period currently. The license fees are doubled to correspond to the change. Continuing education requirements are increased under the bill. All license application fees are made nonrefundable. Other "technical" amendments were noted in the review. Commissioner Vines noted the bill was revenue neutral.
Senator Scott moved the bill be introduced in the upcoming session. The motion was seconded by Representative Illoway. Senator Scott moved page 3-line 9 to strike "annual". The motion was seconded and passed. The main motion, as amended, passed unanimously.
LSO staff explained 04 LSO 0097.W2. The bill was drafted based upon comments made at the last meeting regarding homeowner's insurance and a motion to draft a bill based upon the Cochairmen's direction. The bill limits insurance cancellation and nonrenewals based upon acts of God and claims history unless the claim is a written demand for payment, would limit cancellation of binders and cancellation and failure to issue policies based upon consumer reporting authority and insurance claim reporting.
Commissioner Vines noted the first issue regarding acts of God might be too restrictive and could be amended to prohibit cancellation and nonrenewal based upon multiple acts of God. The specification of a written demand for payment could also be problematic. He supported the provisions applying cancellation notifications to homeowners policies.
Brent Kunz and Tim Dailey, representing State Farm, addressed the Committee. State Farm has started to issue directives to agents "loosening" standards for new policies. Mr. Dailey noted that if companies are too restricted in what they may consider, rates for remaining customers might rise. Mr. Dailey stated that State Farm had previously considered inquiries as claims but was no longer doing so, at least for personal policies, it was not clear whether they were doing so for business policies. The information provided under W.S. 26-3-131 is currently provided in most cases and State Farm did not object to that provision. On binders, State Farm suggested that realtors and insurers should be instructed to work out the issue. On the renewals, the additional notification requirements will add costs to the insurance policies.
Mike Morris, representing Farmer's insurance, testified that his company nonrenews less than 1% of the policies based upon claims history. His view is that the problem is not cancellations based upon the number of claims, but what is considered a claim. He also supported the Committee urging realtors and agents to get together on the issue of cancellations of binders and nonissuance of insurance policies.
The Committee heard other industry representatives views on the issues presented.
Representative Illoway moved to sponsor the bill as a Committee bill in the upcoming session. The motion was seconded.
Senator Scott moved page 2-line 5 to delete "nor the renewal thereof denied". There was no second. Senator Case moved to changing page 2-lines 4 through 6 to read "No homeowner's insurance policy shall be denied renewal solely as a result of a single claim within a three (3) year period arising from natural causes." Senator Scott seconded. Senator Meier moved to amend the motion by including a separate provision for cancellation reading "No homeowner's insurance policy shall be cancelled solely as a result of any claim arising from natural causes.". The amended was accepted as a friendly amendment and passed.
Senator Case moved page 3-line 18 delete "written" and insert "nonwithdrawn". The motion was seconded by Representative Illoway and passed.
Senator Meier moved page 7-line 7 to delete "as soon as practicable" insert "the" after "on"; delete "timely" on line 10. Representative Illoway seconded. Senator Scott moved to amend the motion by inserting on page 7-line 1 after "(a)", "This subsection shall apply,"; insert "." after "insurance" on line 6 and delete the balance of the line and lines 7 and 8 and 9 through "coverage.". On line 10, delete "timely" and insert "within twenty (20) business days of issuing a binder". Senator Meier withdrew his motion and Senator Scott's motion was seconded and motion passed.
Senator Scott moved on page 7-line 11, after "coverage" insert "if a binder has been issued". The motion passed.
Senator Scott moved on page 7-line 16 to delete the lines through "insurance" on line 23. The motion failed.
Representative Illoway moved on page 11-line 24 and 25 to strike "or personal lines auto policies". The motion was seconded and passed.
Representative Illoway moved page 13-line 11 after "and" insert "make available to"; and on line 17 after "given" to insert "to the insured". The motion was seconded and failed.
Representative Illoway moved to make the bill immediately effective. The motion was seconded and failed. Senator Meier moved to make rulemaking authority under the bill immediately effective. The remainder to be effective July 1, 2004. The motion passed.
Senator Scott moved to lay the bill back to the next meeting as amended, with a W3 version being prepared by the LSO. The motion passed.
The subcommittee on contractor licensing was approved to meet again if necessary. The cochairmen were directed to write a letter to the department of family services asking for additional implementation of TAP program.
The next meeting was set for January 8 and 9.
The meeting adjourned at approximately 6:30 p.m.
Respectfully submitted,
Senator Curt Meier, Cochairman